A television screen in the Rocky Mountain Innosphere shows the real-time output of the Abound Solar panels outside the building. / Trevor Hughes/The Coloradoan

Office chairs sit outside the empty Abound Solar facility in Longmont following an October auction of the company's assets. Abound's solar technology spun off from Colorado State research, but manufacturing issues and competition from foreign manufacturers ultimately led to the company's collapse. / Trevor Hughes/The Coloradoan

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In the gleaming lobby of the new Rocky Mountain Innosphere building in Fort Collins, a large television tells you in real time how much electricity the solar panels outside are generating.

Funded in part by the city of Fort Collins and CSU, the 2-year-old Innosphere is a place for Northern Colorado’s best and brightest to collaborate and create, particularly in the fields of biotechnology and alternative energy. The building was designed as a showcase for that work, and the dozens of solar panels above the parking lot help drive the point home.

But while the television in the lobby at 320 E. Vine Drive will tell you how much power the panels are generating today, it won’t tell you that the entire installation had to be ripped out and replaced after only a year. Why? Because the panels manufactured only 35 miles away by homegrown Abound Solar stopped working properly.

Court records and federal filings show that faulty panels just like those installed at the Innosphere played a significant role in Abound’s spectacular and ongoing collapse that’s left thousands of creditors and hundreds of employees wondering what happened and American taxpayers out $70 million.

“That was the problem — unrealistic expectations for their product,” said Jim Welch of Bella Solar, a leading installer of residential and commercial systems that is based in Louisville, Colo. “It had a lot of risk and it was the wrong technology.”

Abound spun out of Colorado State University in 2007 after university researchers developed a way to make a new type of solar panel. Instead of using an established technology, the researchers were making what are called thin-film panels, which could have been cheaper to manufacture.

Welch, who has decades of experience in solar panel installations, served as an unpaid consultant during Abound’s early years. He said he repeatedly warned Abound executives about the challenges they faced.

Other solar panel manufacturers faced the same problems when they got going in the 1980s, Welch said.

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“It took them 20 years and half a billion dollars worth of investment before they came out with a commercial product,” Welch said. “I said, ‘It’s going to be very hard to meet your goals and have a commercially available product in a few years.’ ”

Abound pushed ahead, drawing in about $200 million in private-sector investments. The company abandoned plans to build a massive manufacturing facility in Fort Collins and instead rented a building near Longmont, then pursued an even larger facility in Indiana.

In late 2010, around the same time it was making and installing the faulty panels at the Innosphere in Fort Collins, Abound received a federal loan guarantee worth up to $400 million. Within months, however, the company alerted federal overseers that it was having problems making reliable panels.

In an early 2011 memo sent to federal overseers at the Department of Energy, Abound officials repeatedly referred to “underperforming product” and said they were going to miss revenue targets because they were spending so much money replacing faulty panels.

Abound officials repeated similar warnings that entire year and said DOE engineers were examining the budget to find “technical solutions to our products’ under-performance for power.”

That’s exactly what Welch said happened with the panels at the Innosphere. And he would know — his company was hired to replace them at Abound’s cost. It’s unclear how much the Innosphere paid for the panels in the first place, but they were replaced at no cost by the company.

“The problem was that they weren’t producing a stable product,” Welch said. “They weren’t happy with the performance, and they decided to put in a whole new set of panels.”

Solar panels work by capturing the sun’s radiant light and transforming it into electricity. But if they aren’t made well, they can be inefficient out of the box, lose efficiency over time or just not ever work right.

While no one questions that Abound’s technology worked well in the lab, the memos sent by company officials to federal overseers make it clear that manufacturing problems were costing the company both time and money. The memos were first obtained by the Northern Colorado Business Report.

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Eventually, the DOE cut off Abound’s access to the loan guarantee because the company repeatedly missed financial targets. Specific details about the now-defunct company’s finances were kept secret.

Several congressional committees are investigating whether the DOE should have done a better job of monitoring Abound and whether the White House improperly pushed DOE officials to offer Abound the loan.

Weld County District Attorney Ken Buck, a former federal prosecutor, has opened a criminal investigation into whether Abound misled investors by hiding its manufacturing problems.

DOE officials have repeatedly refused to discuss exactly what happened with Abound. In a lengthy statement issued shortly before Abound declared bankruptcy, however, a DOE spokesman attributed the company’s troubles to the “intense competition” from Chinese manufacturers making the older-style and suddenly cheaper solar panels with help from government subsidies.

That’s how CSU officials see the Abound situation. In an interview, Bill Farland, CSU’s vice president for research, laid Abound’s failure squarely on the economy and the Chinese panels.

“I think it was a victim of the economic circumstances we were going through,” Farland said. “The economy just worked against Abound ...”

CSU never directly invested in Abound, but instead took an equity position based on the patents and other contributions. It manages those kinds of partnerships through an arm called CSU Ventures. CSU officials say they were “surprised” when Abound shut down last March and then declared bankruptcy this summer.

Farland said CSU is committed to seeing someone else take up its patents and continue Abound’s work. CSU licensed the patents to Abound, and because those patents are valuable, CSU has become one of the bankrupt company’s creditors.

“This work will continue,” Farland said. “We hope at some point the technology will be taken up by another company. The technology continues to be very strong and very good.”

Welch disagrees. After decades working in the field, he’s unconvinced the technology used by Abound will ever be reliable and cheap enough to replace more conventional panels. He says Fort Collins, including CSU, the city and the Innosphere, should have been more careful about spending money on Abound.

“I applaud the local Fort Collins community for wanting to invest in this,” Welch said. “The community got all jazzed, and that includes the incubator, people at the city, the clean tech people. They were so caught up in this great idea that they really didn’t do their due diligence. And as a result, it’s given a black mark to the efforts of economic development in the city. But that doesn’t mean it wasn’t worth doing.”

Welch’s company never got paid for its work replacing the Innosphere’s faulty panels, which he said isn’t a big deal in the grand scheme of things.

“I don’t see this as an embarrassment,” Welch said of Abound’s failure.

“The most important thing is that they tried. They didn’t waste the money. It was just a bad bet.”

Innosphere director Mike Freeman, who worked at CSU Ventures before taking his current job, ignored multiple efforts by the Coloradoan to reach him.